KU Leuven Project Management - Part 3 PDF

Project Management Dries Vandevyvere (Proj3ctS BV) KU Leuven © Proj3ctS - Dries Vandevyvere - 2024 Introduction - Course Content Part 1: Intro, stakeholders, change & scope management What is a project? How does project management work? Why does it matter?...

Project Management Dries Vandevyvere (Proj3ctS BV) KU Leuven © Proj3ctS - Dries Vandevyvere - 2024 Introduction - Course Content Part 1: Intro, stakeholders, change & scope management What is a project? How does project management work? Why does it matter? Stakeholder management + change + communication + team motivation How to define and manage the scope of the project Part 2: Estimating, scheduling & resources Reliable project estimates Project Scheduling done right Optimize resource scheduling Part 3: Risks, progress & Agile Project Risk Management Tracking progress and keeping your project on track + Earned value management Project management in an Agile world Hybrid project management: the best of both worlds © Proj3ctS - Dries Vandevyvere - 2024 Agenda - Covered in these slides Project Risk Management Introduction: Why risk management? Defining risk Risk & human behavior Risk management process Tracking progress and keeping your project on track Introduction Data & forecast Earned value management Hints for successful project management Project management in a VUCA world Being agile Doing agile Hybrid project management: the best of both worlds © Proj3ctS - Dries Vandevyvere - 2024 Agenda - Covered in these slides Project Risk Management Introduction: Why risk management? Defining risk Risk & human behavior Risk management process Tracking progress and keeping your project on track Introduction Data & forecast Earned value management Hints for successful project management Project management in a VUCA world Being agile Doing agile Hybrid project management: the best of both worlds © Proj3ctS - Dries Vandevyvere - 2024 © Proj3ctS - Dries Vandevyvere - 2024 Project risk management Projects are uncertain. Otherwise it would not be projects. We know there is risk, we have experienced it. Why not act accordingly? It’s all about finding the right balance © Proj3ctS - Dries Vandevyvere - 2024 Project risk management: Why ? Hope is not a strategy Cost, schedule and technical performance are inseparable, but no single point estimate of schedule or cost can be correct Seen without risk, time and cost are deterministic, whereas reality shows they are probabilistic EVM focuses on reporting past performance whereas risk management focuses on dealing with future events It’s not about random chance or preventing risks It’s about managing cost, schedule and technical performance, about defining mitigations in the presence of uncertainty © Proj3ctS - Dries Vandevyvere - 2024 Project risk management: Why ? Having a (good) project plan is no guarantee for success © Proj3ctS - Dries Vandevyvere - 2024 Example Simple plan with 2 activities At the end of the first activity we expect a delivery that is crucial for our 2nd activity. This means there is a risk. Especially if we are unsure that the supplier will deliver on time. If this happens, we need to look for another supplier & the deadline is in jeopardy © Proj3ctS - Dries Vandevyvere - 2024 Example Focus on the critical path: This is created without risk management Every risk with impact on duration on the critical path leads to a risk of delay for the full project. When the risk materializes, there is a delay In our example: 4 weeks When we are smart PM’s, we take time at the beginning of the project for risk management 1 week to identify and manage risks We discover the supplier risk and start the search for an alternative The 1 week risk management extends the project duration, but reduces the uncertainty of the project delivery. © Proj3ctS - Dries Vandevyvere - 2024 Link with estimating The challenge: In a project, estimates of time & cost are required. Especially at the start to determine the budget and duration of the project. But this is the moment you have the least amount of information. You can improve by applying the estimating techniques (see part 2) After estimating: Apply risk management to determine your contingency & management reserve. Note: don’t let the cost & time to come to an accurate estimate and detailed risk management impact your project cost & duration (too much). © Proj3ctS - Dries Vandevyvere - 2024 Link with estimating Be mindfull of operational ‘risks’ that lead to delays Student syndrome: Procrastinate and delay until the very last moment Parkinson’s law: Work expands to fit the time allowed Busy trap Solutions ? Timeboxing Know that adding resources does not always lead to the desired result © Proj3ctS - Dries Vandevyvere - 2024 Risk: Contingency & cost baseline © Proj3ctS - Dries Vandevyvere - 2024 Project risk management: Why ? Summary: Managing your risk improves your project plan Seen without risk, time and cost are deterministic, whereas reality shows they are probabilistic. It’s not about random chance or preventing risks, it’s about managing cost, schedule and technical performance, about defining mitigations in the presence of uncertainty. © Proj3ctS - Dries Vandevyvere - 2024 Define risks Probability (P) and Impact (I) determine the Risk Exposure (E): P x I = E © Proj3ctS - Dries Vandevyvere - 2024 Define risk: Types of risk Business & Strategic market Political, Asset / Liability economic & Financial social Commodity & Equity Brand & public Natural hazards Hazard image Currency Public liability Technological Duration Physical asset Physical Competitors, Investment Operational Impairment Logistical Organisation Credit Business Security Legal & Liquidity regulatory Interruption Compensation, Executive Information liability technology Business Continuity Systems & controls Processes & people © Proj3ctS - Dries Vandevyvere - 2024 Risk Breakdown Structure (RBS) Project Definition (PMI): A hierarchical Project Technical External Organizational Management representation of risks according to their risk Requirements Subcontractor or Supplier Project Estimating categories. Technology Regulatory Dependencies Planning The risk breakdown structure Complexity and (RBS) is a (hierarchical) checklist Market Resources Controlling Interfaces to support the identification Performance and management of risks Customer Funding Communication and Reliability Quality Weather Prioritization © Proj3ctS - Dries Vandevyvere - 2024 Define risks Types of risk (other perspective) Individual Project Risks: a specific event that impacts the project objectives Overall Project Risks: The effect of all sources of uncertainty on the project objectives Are useful when you look at the feasibility of your project Defines the contingency And some more: Non-event risks Variability risks: Risks that are not linked to an event, but related to uncertainty about a characteristic of an event, activity or decision. E.g. Productivity of a team Ambiguity risks: Related to uncerainty in the future. Aka ‘unknown unknowns’. E.g. Future legislation Project Resilience The project can be impacted by ‘unknown unknowns’. These are only identified when they show up during the project. To shield the project against this, you need contingency. Also a clear view on the priorities of the stakeholders, agreed project objectives and documented assumptions Integrated Risk Management Projects to happen on an island. There is an organizational context to consider. Projects can be part of a program or a portfolio of projects. Risks can be escalated or delegated to another level An organization-wide & integrated approach to risk management leads to coherence and efficiency © Proj3ctS - Dries Vandevyvere - 2024 Risk & human behavior Human behavior has a strong influence on risk management Considerations Risk seeking vs Risk averse Process & conformance: Bureaucracy Meritocracy Decision taking: Group dynamics Buy vs make State of mind: “We think, then we feel, and then we act” “Many times in business do we make decisions based on mitigated risk or what we stand to lose?” © Proj3ctS - Dries Vandevyvere - 2024 Risk & human behavior Project managers Usually manage risk intuitively: only the risks they recognize and in their own area of knowlege/expertise Manage the symptoms: cost & time Only in the ‘risk season’ and with an ad hoc approach In many companies managing a crisis is better than prevent a crisis Group decision Strong personalities dominate the discussions ‘Free-riders’ Shared responsibility leads to higher risk appetite Decision making vs decision taking © Proj3ctS - Dries Vandevyvere - 2024 Risk & human behavior: advice Focus on what you want to achieve, not on what you try to avoid. Make more mistakes: fail fast, fail often, but always fail forward Try to understand before trying to be understood It is not about the money. Find the why. Nobody is neutral. Everybody has a bias. Look for the purpose. © Proj3ctS - Dries Vandevyvere - 2024 Risk management: process Identify risks Monitor Analyze risks risks Plan & mitigate risks © Proj3ctS - Dries Vandevyvere - 2024  Identify risks Identify risks: tools & techniques Monitor risks Analyze risks Plan & mitigate risks Brainstorm Information gathering Delphi techniques Interviewing 5 Why’s Ishikawa / Fishbone Diagramming techniques Influence Diagrams (or relevance diagram, decision diagram or decision network) Pareto: 80/20 Checklists Analysis Assumptions Strengths Weaknesses SWOT Opportunities Threats Expert judgment Previous experience © Proj3ctS - Dries Vandevyvere - 2024  Identify risks Identify risks: tools & techniques Monitor risks Analyze risks Plan & mitigate risks Fishbone Influence diagram © Proj3ctS - Dries Vandevyvere - 2024 Causes Potential Effect © Proj3ctS - Dries Vandevyvere - 2024 © Proj3ctS - Dries Vandevyvere - 2024  Identify risks Identify risks: output Monitor risks Analyze risks Plan & mitigate risks Risk list Risk consists of three parts: An overview list of all identified risk 1. an uncertain situation 2. the likelihood of occurrence of The basic attributes per risk the situation 3. the effect (positive or negative) that the occurrence would have Risk form on project success. Description Impact & probability Result of the quantitative analysis A marker of a good quality risk Risk response statement is that it can answer the Selected response following questions: Actions Triggers What could happen? Contingency Why could it happen? Why do we care? Indicators for monitoring © Proj3ctS - Dries Vandevyvere - 2024 Exercise: initial schedule & cost / data © Proj3ctS - Dries Vandevyvere - 2024  Identify risks Analyse risks: tools & techniques Monitor risks Analyze risks Plan & mitigate risks Probability & P&I matrix impact Assessment scales assessment Expert judgement Risk Same root-cause = same approach categorization Risk Breakdown Structure (RBS) Risk urgency How quick do we need to take action? assessment Risk data quality Evaluate how good your data is to do an analysis assessment © Proj3ctS - Dries Vandevyvere - 2024  Identify risks Probability & Impact Matrix Monitor risks Analyze risks Plan & mitigate risks Quantitative Risk Analysis Qualitative Risk Analysis © Proj3ctS - Dries Vandevyvere - 2024  Identify risks Risk Severity (Score) Monitor risks Analyze risks Plan & mitigate risks Risk Severity/ Risk Score = IMPACT * PROBABILITY © Proj3ctS - Dries Vandevyvere - 2024  Identify risks Probability & Impact Matrix Monitor risks Analyze risks Plan & mitigate risks Question: do you spot the difference in risk appetite? "risk averse" vs "risk seeking" © Proj3ctS - Dries Vandevyvere - 2024  Identify risks Impact Definitions Monitor risks Analyze risks Plan & mitigate risks © Proj3ctS - Dries Vandevyvere - 2024  Identify risks Analyze risks: output Monitor risks Analyze risks Plan & mitigate risks Main output: an updated risk register In some occasions the assumptions also need updates Outputs Priority based list of risks List of risks grouped by category. E.g. by root cause to optimize the risk response Urgent risks: list of risk that need action in the short term List of risks that need further analysis Risk watchlist … © Proj3ctS - Dries Vandevyvere - 2024 Exercise © Proj3ctS - Dries Vandevyvere - 2024 Exercise: three point estimate © Proj3ctS - Dries Vandevyvere - 2024  Identify risks Plan & mitigate risks: responses or strategies Monitor risks Analyze risks Plan & mitigate risks For threaths Avoid Transfer Mitigate For opportunities Exploit Share Enhance For both Escalate (see “integrated risk management”) Accept Make contingency/fallback plan + trigger © Proj3ctS - Dries Vandevyvere - 2024  Identify risks Plan & mitigate risks: response examples Monitor risks Analyze risks Plan & mitigate risks Avoid: buy a bond instead of a share Transfer: take an insurance Mitigate (impact): diversify your investment portfolio Mitigate (probability): an employee receives stock options from his employer Exploit: staff your most senior resources on the project Share: cost plus award fee contracts Enhance (probability): add resources to make an early finish (and bonus) © Proj3ctS - Dries Vandevyvere - 2024  Identify risks Plan & mitigate risks: responses Monitor risks Analyze risks Plan & mitigate risks Plan of attack: how to plan risk responses 1. Do you have direct or indirect control on the risk 2. Is it worth the effort to take action 3. Investigate If it is possible to avoid, transfer … If not, check if the probability or impact can be lowered 4. Determine the cost of the actions and consequences 5. Evaluate the remaining risk (= remaining impact and probability) If the impact of the actions and the calculation of the remaining risk are smaller than the calculation of the impact of the original risk => Take action Define KPI’s to check the outcome of the risk response If you don’t take action: determine the triggers for the action(s) Integrate into the project management plan => Change requests ! © Proj3ctS - Dries Vandevyvere - 2024 Exercise: risk register © Proj3ctS - Dries Vandevyvere - 2024 Exercise: scenarios Total cost: Scenario 1: 672 € Scenario 2: 547 € Choice = scenario 2 © Proj3ctS - Dries Vandevyvere - 2024  Identify risks Monitor risks Monitor risks Analyze risks Plan & mitigate risks © Proj3ctS - Dries Vandevyvere - 2024 Exercise: new risk identified © Proj3ctS - Dries Vandevyvere - 2024 Risk management: Conclusion Rembember what is a risk: opportunity or threat Adapt to the context: more complexity requires more (risk) management Don’t only do risk management in the ‘risk season’. Manage risk continuously throughout your project. Know your stakeholders: Who is risk seeking? Who is risk averse? Use the PI matrix (probability/impact) What are your options? => Different risk responses © Proj3ctS - Dries Vandevyvere - 2024 Risk management: Conclusion Hope is not a strategy Cost, schedule and technical performance are inseparable, but no single point estimate of schedule or cost can be correct Seen without risk, time and cost are deterministic, whereas reality shows they are probabilistic EVM focuses on reporting past performance whereas risk management focuses on dealing with future events It’s not about random chance or preventing risks It’s about managing cost, schedule and technical performance, about defining mitigations in the presence of uncertainty © Proj3ctS - Dries Vandevyvere - 2024 Agenda - Covered in these slides Project Risk Management Introduction: Why risk management? Defining risk Risk & human behavior Risk management process Tracking progress and keeping your project on track Introduction Data & forecast Earned value management Hints for successful project management Project management in a VUCA world Being agile Doing agile Hybrid project management: the best of both worlds © Proj3ctS - Dries Vandevyvere - 2024 Tracking progress: intro Definitions A project: Group of activities within a temporary organization with pre-defined conditions and pre- defined results. Unique situation limited in time and means. Project management: The practice of initiating, planning, executing, controlling, and closing the work of a team to achieve specific goals and meet specific success criteria at the specified time. Measured by targets: Scope, quality, time cost (the PM triangle) Resources, safety, … A project manager manages these predefined targets Managing = Define / Measure & control / Evaluate / Act & correct © Proj3ctS - Dries Vandevyvere - 2024 Tracking progress: basics What is managing? Define: see previous session on scope, schedule, budget Measure & control: what is the situation? (this session) Evaluate: success and failure (this session) Act and correct: the work part The better the “define”, the easier the measure, control & evaluate Data for tracking 1. Baselines 2. Governance & project (status) reporting 3. Other: Tracking tools Use your eyes ! © Proj3ctS - Dries Vandevyvere - 2024 Tracking progress: baselines Every project is approved after its Project Definition Phase: The critical project parameters are defined and set as a starting point. The scope has been defined and fixed in your Functional description and WBS. The schedule has been defined and fixed in your Project Schedule. The budget has been approved and fixed based on your WBS. The resources are defined in the Resource Plan The baselines are your Reference Point to compare your actual situation All deviations to these critical parameters need to be approved by the higher hierarchy (e.g. Steering committee) Change management: All approved change requests should be incorporated in the new baseline © Proj3ctS - Dries Vandevyvere - 2024 Tracking progress: Governance & reporting Governance: The way your project is managed Described in your Project Execution Plan Reporting Communicate with your stakeholders & team Communication between all levels and with all stakeholders is required Decisions are going top-down Data (information) in order to make the correct decisions needs to go bottom-up © Proj3ctS - Dries Vandevyvere - 2024 Tracking progress: meetings Steering committee (SteerCo) meeting: Participants: steering committee (incl. sponsor) + PM Typical frequency: 1/month Purpose: Inform senior management about the status of your project Take strategical decisions (or decide to change project parameters) SteerCo & PM can only take good decisions, if the are supplied with the correct and complete actual status of the project. Team coordination meetings Participants: PM + All team members Typical frequency: weekly Purpose: Project decisions are taken Team members deliver status on budget, schedule, resources, issues… Next actions are defined © Proj3ctS - Dries Vandevyvere - 2024 Tracking progress: meetings Typical topics: completed activities / upcoming activities issues (to escalate) / risks planning / budget How to prepare a meeting? All team members need to prepare in advance the topics Status on budget, schedule, resources, issues and all required information needed from colleagues All next actions need to be defined All required decisions Meeting preparation needs to be sent in advance to the meeting owner. Golden tip: Prepare a template to be completed by each individual As a project manager these meetings should be your main source for data collection and tracking © Proj3ctS - Dries Vandevyvere - 2024 Recap: The project triangle Every project has a: Scope: what needs to be delivered ? Budget: how much will it cost ? Plan: How long will it take? Manage the triangle ! © Proj3ctS - Dries Vandevyvere - 2024 Tracking progress: What to track ? Now that we are x weeks in the project: Looking back: What’s the status after x weeks? Looking forward: What’s your forecast for the remainder of the project Looking back Looking forward Scope Scope delivered? Scope changes pending Scope changes (dis)approved Scope creep issues Scope creep experienced? Budget Adherence to budget Will be deliver within budget? Schedule Adherence to Schedule Will we make it in time? (Human) resources Utilization (actual ytd) Utilization (forecast ETC) Team changes Team changes Team check © Proj3ctS - Dries Vandevyvere - 2024 Tracking progress: Input for tracking Looking back Looking forward Scope Scope baseline WBS + open change request WBS + change requests (% not completed) (% completed 100%) Budget Budget Baseline (BAC) + change Actuals + estimate to complete requests vs actuals from (ETC)= Estimate at completion timesheets Schedule Schedule Baseline: Re-estimate the critical path Gantt chart + Milestone Plan vs actual progress (Human) Resources Utilization (actual ytd) Utilization (forecast ETC) Team changes Team changes Team check © Proj3ctS - Dries Vandevyvere - 2024 Budget Follow up - example What’s the status ? © Proj3ctS - Dries Vandevyvere - 2024 Budget Follow Up - example What’s the truth ? a) overall total actual cost = total budget: we are fine ! b) Stage construction is ahead of plan c) Stage construction is below budget d) Stage construction is behind plan e) Stage construction is above budget © Proj3ctS - Dries Vandevyvere - 2024 Budget Follow Up Some figures can prove anything or actually nothing! a) overall total cost= total budget: we are fine ! Maybe this small overrun has a major impact on the remainder of the work to do? b) Stage construction is ahead of plan : we only have cost data no impact on timing! c) Stage construction is below budget: maybe less spent because just started? d) Stage construction is behind plan: time factor not mentioned! e) Stage construction is above budget Maybe started early of delivered more than planned? Are the tasks completed or not ? If not what’s the percentage completed ? And doesn’t provide any time indication ! © Proj3ctS - Dries Vandevyvere - 2024  Schedule Follow Up Week 1 Week 2 Week 3 Week 4 Week 5 Week 6 Week 7 Week 8 Stage Construction Stadium Construction We are now at the end of Week 3. What’s the truth ? a) We are working on the Stage Construction, so we are on time ! b) We are working on Stage Construction, so we are ahead of schedule c) We are working on Stage Construction, probably we are behind schedule ? It can all be true! © Proj3ctS - Dries Vandevyvere - 2024 RAG (Red-Orange-Green) reporting Status Update Week 3: We are making progress on stage construction and already started on the Stadium construction, 2 weeks earlier than planned Week 1 Week 2 Week 3 Week 4 Week 5 Week 6 Week 7 Week 8 Stage Construction Stadium Construction © Proj3ctS - Dries Vandevyvere - 2024 The truth is still out there a) Total cost = total budget: for these 2 tasks? What’s the total view ? Making costs delivering b) Ahead or behind plan? Maybe we only need to spend 1 day to finish off the seat numbering! Or 20 days left ? c) What’s the percentage completed? Text says still in progress : 10% or 90% finished ? d) Ahead of plan? Maybe we just started early on stadium construction but making zero progress on stage ? e) Just starting early on Stadium Construction doesn’t mean you are ahead of plan… is it even on the critical path ? Status Update Week 3: We are making progress on stage construction and already started on the Stadium construction, 2 weeks earlier than planned Week 1 Week 2 Week 3 Week 4 Week 5 Week 6 Week 7 Week 8 Stage Construction Stadium Construction © Proj3ctS - Dries Vandevyvere - 2024 ISSUES with RAG reporting Time Lag before getting the info Not accurate Subjective © Proj3ctS - Dries Vandevyvere - 2024 Budget & schedule tracking Tables Graphics & curves Earned value management © Proj3ctS - Dries Vandevyvere - 2024 Tracking: tables for budget Tip use excel Minimum sheets Overview Summary of your different work packages (see WBS) Used to Inform your steering committee Allows to take strategical decisions and organize budget transfers between the different packages Detailed cost follow-up per line of your WBS: allows to follow-up in detail Minimum information per work package Package name (and WBS Code) Approved budget Committed (ordered): what has been blocked for a certain package Invoiced (what has been paid or used as hours) Assigned Estimate to complete (ETC = your forecast): amount extra required for completing the package correctly Total forecasted budget: assigned + estimate to complete © Proj3ctS - Dries Vandevyvere - 2024 Tracking: schedule In your work schedule: Note the percentages of completion Reschedule the tasks not executed Graphics: different types to get the best overview of the situation © Proj3ctS - Dries Vandevyvere - 2024 Tracking: S-curves How to set-up, interpret the S-curves and forecast? 1. Set-up 1. X-axis: Time in days, months, years, quarters… 2. Y-axis: budget: budget in value or % Schedule: workload in %, #resources, total working hours 3. Set-up the budget and/or schedule as mentioned in your baseline. The amount of work is the total surface under the S-curve. © Proj3ctS - Dries Vandevyvere - 2024 Tracking: S-curves 2. Tracking Add the cumulative actual sitution If on track: Great job ! Go to continuous risk management Deviations: above or under baseline © Proj3ctS - Dries Vandevyvere - 2024 Tracking: S-curves Actual above baseline Schedule: You are progressing faster than scheduled in the baseline No issue TODAY! Ensure that future action are well scheduled by doing continuous risk management Budget: Your attention is required Issue? Yes, if you spend more budget than foreseen for the amount of work in your baseline No, if your schedule is in advance and you have performed work that was intended to happen in the future Anyway, calculate the deviation in percentages Analyse if there is a trend If yes, multiply the future baseline numbers with this percentages and it will give you a rough idea as a forecast, if you do nothing © Proj3ctS - Dries Vandevyvere - 2024 Tracking: S-curves Actual under the baseline Budget: You are spending less budget than foreseen Why? You did the same amount of work with less resources or cost? Great job! Go to continuous risk management. You ordered too late? You do not have enough resources to do the work? …Issue! Schedule: You are behind schedule Why? You ordered too late? You do not have enough resources to do the work? …Issue! Take action! © Proj3ctS - Dries Vandevyvere - 2024 Tracking: S-curves Always find the correct reason for the (positive or negative) deviation! You ordered too late, You do not have enough resources, You do not have the correct resources The price is higher than foreseen You have technical issues … Never just believe the graphics Delays can be hidden by strong progress on other packages. Make an overall S-curve for the project, but also make S-curves per main package. In case of serious doubts or issues with a sub-package, make a separate S- curve to follow-up in detail. © Proj3ctS - Dries Vandevyvere - 2024 Earned Value Management (EVM) What? A methodology that combines scope, schedule and resource measurements to assess project performance and progress. It compares the performance measurement baseline to the actual schedule and cost performance. It integrates the scope baseline with the cost baseline and schedule baseline to form the performance baseline. 3 indicators are the basis: Planned value (PV): the amount expressed in € of work to be performed as per scheduled plan Actual Cost (AC): the budget that is actually spent Earned value (EV): the budget corresponding to the carried work, regardless of the budget actually spent © Proj3ctS - Dries Vandevyvere - 2024  EVM: Basics 4 forecasting 3 input parameters 4 performance indicators indicators Schedule Performance Estimate at Completion Planned Value Cost Performance Estimate to complete Earned Value Schedule Performance Index Variance at completion Actual Cost Cost Performance Index To-complete performance index © Proj3ctS - Dries Vandevyvere - 2024 Earned Value Management (EVM) Planned value (PV): the amount expressed in € of work to be performed as per scheduled plan Actual Cost (AC): the budget that is actually spent Earned value (EV): the budget corresponding to the carried work, regardless of the budget actually spent © Proj3ctS - Dries Vandevyvere - 2024 EVM: variation analysis Cost variance (CV) The amount of budget deficit or surplus at a given point in time, expressed as the difference between the earned value and the actual cost CV = EV - AC CV greater than 0 is good (under budget) Cost performance index (CPI) A measure of the cost efficiency of budgeted resources expressed as the ratio of earned value to actual cost. CPI = EV / AC CPI greater than 1 is favorable (under budget) < 1 means that the cost of completing the work is higher than planned (bad) = 1 means that the cost of completing the work is right on plan (good) > 1 means that the cost of completing the work is less than planned (good most of the time) Schedule variance (SV) SV = EV - PV SV greater than 0 is good Schedule performance index (SPI) SPI = EV / PV SPI greater than 1 is favorable © Proj3ctS - Dries Vandevyvere - 2024 EVM: variation analysis © Proj3ctS - Dries Vandevyvere - 2024 EVM: additional indicators 4 indicators used to estimate the end of a project BAC (Budget At Completion) = Initial project budget EAC (Estimate At Completion) Budget reassessed EAC = AC + estimated remaining work. The remaining work can be estimated in different ways: manual re-estimation remaining work = (BAC - EV) / CPI: initial budget - budget corresponding to the work carried out, weighted by the cost performance indicator – valid when future cost performance will be based on past cost performance ETC (Estimate To Completion) budget remaining to be consumed to complete the project. ETC = EAC – AC TCPI (To Complete Performance Index) Cost Performance Index evaluated on what’s left to be done. TCPI = (BAC - EV) / ETC This indicator, compared to the CPI, makes it possible to identify differences in performance between the work performed and the forecast work This allows to identify abusively optimistic forecasts or to correct overly pessimistic forecasts. © Proj3ctS - Dries Vandevyvere - 2024 EVM EVM contributes to: Preventing scope creep Improving communication and visibility with stakeholders Reducing risk Profitability analysis Project forecasting Better accountability Performance tracking Limitations of EVM: Exact measurement of earned value may not be accurate Formulas are unfamiliar unless used daily – must be careful when passing information Only covers cost and schedule, no quality Important Completing work packages Breakdown size © Proj3ctS - Dries Vandevyvere - 2024 Advice to keep your project on track Evaluate your project on continuous bases. The progress evaluation starts at the beginning of your project. The faster you start, the faster you can anticipate to risks and deviations. Coordination meetings are not timeslots to discuss whatever technical subject. If a subject takes longer than 5 minutes of discussion, than discuss it in a separate meeting. Write meeting reports! Coordination meetings need to be written down in an evolutive report that is updated every week. It contains all information exchange, decisions and actions required. Control your scope. Scope changes are the major reason for delay in a Project. Do not except any scope change from the user without that the consequences on budget and schedule are defined and accepted. Use your eyes! Eyes tell more than all tables and graphics in the world. Go out of your office and control the situation: Are the documents correct and ready? Is the building site progressing? © Proj3ctS - Dries Vandevyvere - 2024 Advice to keep your project on track (cont.) Avoid project delays at the end of the project. E.g. Documentation is missing for maintenance and users Users are not trained Punch list items are not getting closed No testing material is reserved People are getting tired and start to make mistakes Always keep the end in mind Do not forget your project parameters Do not forget to analyze and mitigate your risks. Schedule delay is almost always linked to budget overrun: treat these 2 together. Start all actions on time. Force your team to keep the start date of their actions in mind. This way they are more likely to finish on time. Be honest to your management and to yourself. If you know there is delay or you will have a budget overrun => Report it correctly Best tip: Block a weekly slot in your agenda to complete, analyze and correct your budget and schedule. © Proj3ctS - Dries Vandevyvere - 2024 Agenda - Covered in these slides Project Risk Management Introduction: Why risk management? Defining risk Risk & human behavior Risk management process Tracking progress and keeping your project on track Introduction Data & forecast Earned value management Hints for successful project management Project management in a VUCA world Being agile Doing agile Hybrid project management: the best of both worlds © Proj3ctS - Dries Vandevyvere - 2024  A story: Explaining Agile to grandpa Grandpa, imagine this: you are young, you just got married. You got I would build a tiny house, but with a a plot of land. But winter is coming, solid foundation, so that we can move in before the cold hits. Would lay the roof in you need to build a house in time. a simple fashion, just so we could pass We will call the house a ‘product’ What would you do? the winter. Your first “just to move in to somewhere” house is an MVP (minimum viable product). The house with an annex and the house with the porch are increments. You are a product owner; you take care of what the house will look like. And then? Then the next summer I would build an annex Your husband is a stakeholder; her opinion matters, and redo the roof in a solid way. The summer after that I’d build a porch. The summer after because she will have to live in the house. that one maybe would add another floor. I’d decide with my wife what to do first and what to do next. The list of the annex, porch, another floor, solid roof and. whatever else you like to build is a backlog. When you and your husband sit down and decide what to do, you groom the backlog. © Proj3ctS - Dries Vandevyvere - 2024  A story: Explaining agile to grandpa Your brother and uncle are the developer team. Well, I’m a poor builder myself, but I’m a good setter-up, so I would Now tell me, grandpa, how would keep working at the factory. you go about building your house. I would invite my brother and uncle to build the house for me. My brother is a handy person, and uncle is a smart one — he can do all Their strength lies in being able to replace each other. the blueprints and calculations. So, they are T-shaped people: they both can do one Finally, I would ask my neighbor to feed them three times a day and specific thing very well, but in everything else they can upkeep the peace between them in case they start arguing. help each other out. Your neighbor is a scrum master. His main task is to upkeep the team’s spirit. © Proj3ctS - Dries Vandevyvere - 2024  A story: Explaining agile to grandpa In the beginning of each week, I would discuss what needs buying for the following 1–2 weeks. How would you make sure they do In the morning, before leaving for work, I’d have coffee with them at everything well? And not run out of the neighbors. Would look closely at what they’ve completed and Your discussion at the beginning of each week is a what they will be building. building material? From time to time we would probably all get drunk together and sprint planning. then each one would complain that the others are working worse and less. But then we would be reconciled. Your morning coffee is a stand up. To get drunk and start arguing is to run a retrospective. Each fortnight before the visit is the length of your sprint. When your partner comes — it’s a sprint review. You should plan your sprint in a way that would allow you Grandpa, but what about your I’d bring her along every fortnight. to always have something to show. partner? It would probably be Just in case something goes wrong. interested to take part in building. the house, too. Your housewarming party is the product launch. © Proj3ctS - Dries Vandevyvere - 2024  Project management methodologies Classic Kanban PMBoK Waterfall Plan Based XP Prince2 Hybrid SCRUM Prism Agile CCPM Iterative Value Based © Proj3ctS - Dries Vandevyvere - 2024 The history of Agile: Roots in software development © Proj3ctS - Dries Vandevyvere - 2024 Agile Manifesto (2001): 4 values We are uncovering better ways of developing software by doing it and helping others do it. Through this work we have come to value: Individuals and interactions over processes and tools Working software over comprehensive documentation Customer collaboration over contract negotiation Responding to change over following a plan While there is value in the items on the right, we value the items on the left more. www. agilemanifesto.org www. agilemanifesto.org © Proj3ctS - Dries Vandevyvere - 2024 Agile Manifesto (2001): 12 principles © Proj3ctS - Dries Vandevyvere - 2024 To become agile = a huge change © Proj3ctS - Dries Vandevyvere - 2024 Agile = a mindset © Proj3ctS - Dries Vandevyvere - 2024 Agile Adoption vs Agile Transformation © Proj3ctS - Dries Vandevyvere - 2024 Doing Agile vs Being agile Doing agile Being agile Excellent Clear Self- For the realization execution purpose benefits of a process of others Outside- Inside- Values & in Fast out Principles delivery Intrinsic motivation Following Personal Being procedures leadership Self- compliant organization Value creation © Proj3ctS - Dries Vandevyvere - 2024 To become agile = a huge change © Proj3ctS - Dries Vandevyvere - 2024 SCRUM Basic Concepts & Terminology Product Backlog Sprint DOD Backlog Burn Down Sprint Chart Scrum Scrum Scrum Board Master Planning Daily Poker Standup Velocity © Proj3ctS - Dries Vandevyvere - 2024 Scrum © Proj3ctS - Dries Vandevyvere - 2024 Process Product Backlog Sprint DOD Backlog Burn Down Sprint Chart Scrum Scrum Scrum Board Master Planning Scrum Poker Meeting Velocity © Proj3ctS - Dries Vandevyvere - 2024 Scrum Master & Scrum Team Product Backlog Sprint DOD Backlog Burn Down Sprint Chart Scrum Scrum Scrum Board Master Planning Scrum Poker Meeting Facilitates, guides the process, Velocity takes initiative, protects against Responsible for the outside world. defining priorities. Define the scope & planning. Deliver the work. © Proj3ctS - Dries Vandevyvere - 2024 Product Backlog: “What” Contain all (already known!) requirements Product Documented in “user story” format DOD Backlog Sprint Backlog Prioritized according to business value Burn Down Sprint Rough workload estimate Chart Scrum Scrum Scrum Board Master Planning Scrum Poker Meeting Velocity © Proj3ctS - Dries Vandevyvere - 2024 User Stories: containers for Customer value Written using the following template As a < user role > I want < activity > so that < business value > User role is the description of the person doing the action Activity is what they can do with the system Business Value is why they want to to the activity As a driver, I want to limit the As the Finance Department, As a driver, I want to get a amount of money before I fuel we want to print the receipts receipt after fuleing so that I so that I can control my only for drivers who request can expense the purchase expenditure them so that we save on paper (roles can be people, devices, or systems) © Proj3ctS - Dries Vandevyvere - 2024 Prioritizing the Product Back Log Theory: Prioritize on business value ! Reality: Prioritize on logical/ technical dependencies Also include : Refactoring delivered stories Defects & Incidents © Proj3ctS - Dries Vandevyvere - 2024 Sprint: “When” Product Backlog Sprint DOD Backlog Burn Down Sprint Chart Scrum Scrum Scrum Board Master Timeline: Planning Poker Velocity Scrum Meeting Fixed: usually 2 or 4 weeks or Flowbased Aka “iteration” / “time-box” © Proj3ctS - Dries Vandevyvere - 2024 Scrum Ceremonies Product Backlog Sprint DOD Backlog Burn Down Sprint Chart Scrum Scrum Scrum Board Master 1. Daily Scrum Planning Poker Velocity Scrum Meeting 2. Sprint Planning 3. Sprint Review 4. Sprint Retrospective Slide 108 © Proj3ctS - Dries Vandevyvere - 2024  Scoping – larger picture A fully functional release of a product that represents the smallest possible feature set that addresses the current need of your customers MMR Is a Minimal Marketable Release Informs MMP MVP Minimal Marketable Minimal Viable Product Product Part of Informs Informs The first release of an MMR Used to shorten initial Created to explore a hypothesis time-to-market Often a functional prototype where MMF some functionality is simulated Minimal Marketable or performed manually Feature Your aim is to do just enough work to get something in front of potential end users to learn what they really want A fully functional, single feature or function that provides real value to end users Could potentially be deployed on its own © Proj3ctS - Dries Vandevyvere - 2024 Minimal Viable Product or Marketable Feature, Product, Release MVP MMF MMP MMR is a version of is the smallest piece of The first release of a A release of a product a new product that is functionality that MMR that is that created with the least can be delivered, aimed at early has the smallest effort possible has value to both the adopters, possible feature set provided to a subset organization and the focused on the key offers new value to of potential users. features that will users and addresses customers A part of an MMR or delight this core group their current needs to use for validated MMP learning about them Much closer to prototypes than to the real running version of the product. © Proj3ctS - Dries Vandevyvere - 2024 Estimating Poker for fast, relative estimating Estimating Poker combines expert opinion, analogy, and disaggregation for quick but reliable estimates All team members participate ? 1 2 3 5 8 13 20 40 100 © Proj3ctS - Dries Vandevyvere - 2024 Velocity Product Backlog Sprint DOD Backlog Burn Down Sprint Chart Scrum Scrum Scrum Board Master Planning Scrum Poker Meeting Velocity Productivity Measure of the team # finished story points during this sprint “Actual” velocity is best determined after a few sprints in order to more or less reliable Velocity is used in “Burndown Chart” © Proj3ctS - Dries Vandevyvere - 2024 Burndown chart Product Backlog Sprint DOD Backlog Burn Down Sprint Chart Scrum Scrum Scrum Board Master Planning Scrum Poker Meeting Velocity Predict how much scope can be delivered by a specific date Predict a date for a fixed amount of scope to be delivered Understand our limits while defining the amount of scope we will commit for a sprint © Proj3ctS - Dries Vandevyvere - 2024 DoD: Definition of Done Product Backlog Sprint DOD Backlog Burn Down Sprint Chart Scrum Scrum Scrum Board Master Planning Scrum Poker Meeting Velocity Agreement within the team when things can be considered as finished or “Done” DoD on different levels: Task User Story Iteration Release DoD can be content and/or quality wise © Proj3ctS - Dries Vandevyvere - 2024 SCRUM Basic Concepts & Terminology Product Backlog Sprint DOD Backlog Burn Down Sprint Chart Scrum Scrum Scrum Board Master Planning Daily Poker Standup Velocity © Proj3ctS - Dries Vandevyvere - 2024 Kanban © Proj3ctS - Dries Vandevyvere - 2024 Kanban: Core practices Visualize work Limit work-in-progress (WIP) Manage flow Make process policies explicit Implement feedback loops Improve collaboratively © Proj3ctS - Dries Vandevyvere - 2024 Agenda - Covered in these slides Project Risk Management Introduction: Why risk management? Defining risk Risk & human behavior Risk management process Tracking progress and keeping your project on track Introduction Data & forecast Earned value management Hints for successful project management Project management in a VUCA world Being agile Doing agile Hybrid project management: the best of both worlds © Proj3ctS - Dries Vandevyvere - 2024  The PM triangle: Classic vs Agile Constraints Requirements Cost Schedule Value driven Plan driven Estimates Cost Schedule Features Approach Requirements Activities Delivery Goal Performed once for the Classic (waterfall) Fixed Single Delivery Deliver at cost, on time and at quality entire project Frequent small Customer value via frequent deliveries & Agile (Scrum) Dynamic Repeat until correct deliveries feedback © Proj3ctS - Dries Vandevyvere - 2024 Which method to choose “It depends !” © Proj3ctS - Dries Vandevyvere - 2024 Waterfall vs. Agile - Example Waterfall Agile © Proj3ctS - Dries Vandevyvere - 2024 Risk: Classic vs Agile Classic Agile © Proj3ctS - Dries Vandevyvere - 2024 Stacey Matrix: When to apply which PM Method Kanban.. Or run (requirements) Agile WHAT? Hybrid Waterfall HOW? Tools & technology © Proj3ctS - Dries Vandevyvere - 2024 Hybrid method: How to choose ? Waterfall or Agile? Or both? Choice between the two models depends on quite some parameters Requirements & Regulations Existing Organizational Processes Product Owner Involvement Nature of the Project Timeline Budget Benefits and downsides of the different possibilities. Predominant elements in making the choice 1. “Organizational maturity” and “Leadership style” 2. The ability to predict how your final result needs to behave in all the different situations 3. The ‘kind’ of team you have at your disposal © Proj3ctS - Dries Vandevyvere - 2024 Waterfall or Agile? Requirements and Regulations Many Initial Product Requirements & Strict Regulatory Requirements: Waterfall If your project has strict regulatory requirements and there is little room to make changes, this will push you toward a Waterfall software development methodology. Few Initial Product & Regulatory Requirements: Agile If your project has few initial requirements and doesn’t need to meet strict regulations, an Agile development methodology will result in project creativity and decreased time to market. Existing Organizational Processes Strict Processes in Place: Waterfall If you’re in an organization that has strict processes that they have to adhere to, trying to introduce Agile processes cross-functionally could be challenging, and so the Waterfall methodology will be more suitable. Lenient Processes in Place: Agile If your organization doesn’t have strict processes to follow and you have the luxury of being able to work flexibly, then Agile offers enough benefits to introduce the methodology. © Proj3ctS - Dries Vandevyvere - 2024 Waterfall or Agile? Product Owner Involvement Low Product Owner Involvement: Waterfall If the product owner doesn’t want to be very hands-on, a Waterfall approach allows for involvement only during milestone project check-ins, especially since requirements and project expectations are defined in detail from the get-go. High Product Owner Involvement: Agile If the product owner wants to be more hands-on, an Agile development methodology allows for the product owner to be deeply involved. The product owner is a member of the team and is the owner of the product requirements. The product owner ultimately makes all decisions on the scope and the functionality of the product. Nature of the Project Enhancement to an Existing Product: Waterfall If your team is delivering an enhancement to an existing legacy product where the features are well defined and must interface with known or existing products, then Waterfall may be more appropriate. Greenfield Product: Agile If your team is trying to build something innovative that does not exist in any form today, these types of projects are served well by an Agile software development methodology. It allows the product owner to discover the project’s features and requirements in an iterative way. © Proj3ctS - Dries Vandevyvere - 2024 Waterfall or Agile? Timeline Fixed & Firm Timeline: Waterfall If the project timeline is fixed and can not be moved, Waterfall will offer a more predictable outcome. Short, Flexible Timeline: Agile If you need to get the project delivered in a short amount of time, Agile is the appropriate choice here where action and getting things built is more important than documentation and process. Budget Fixed, Inflexible Budget: Waterfall If the project budget is fixed and can not be increased, Waterfall will offer a more predictable outcome. Budget With Wiggle Room: Agile If you do have some budget flexibility, Agile prioritizes features and speed to market over strictly sticking to a budget. Sometimes a new, valuable feature will be discovered during Agile development, but will require a little extra time and money to execute. If this works for your team, then Agile is best suited for you. © Proj3ctS - Dries Vandevyvere - 2024 Pro & Cons Project Management Methods? Waterfall Agile Hybrid Plus Plus Plus Proper Preparation Flexibility in scope Increased flexibility Planning Fast Feedback (vs waterfall) Better prepped Minus (vs agile) Higher risk of bad Minus surprises Collaboration heavy Minus Front-heavy Poor preparation Requires consensus No fixed plan Mix = confusing © Proj3ctS - Dries Vandevyvere - 2024 Hybrid: Water-scrum-fall Organizations try to mix both methods into one, in order to reap the benefits of both: Hybrid model where the overall project phases follow a Waterfall approach to get to an approved design. Then, Agile methodologies are used during the development phase Product development concludes with a period for testing and integration © Proj3ctS - Dries Vandevyvere - 2024 Hybrid Waterfall for planning: Only for high-level deadlines, deliverables, and contracts with customers Agree only on top level things like final deadlines, milestones, deliverables or classical project phases Identify phases of a project where Agile can come in. The rule here could be if the phase duration is longer than a month, it is worth switching to Agile. Otherwise just go for classic Agile for execution: execution cycles for project tasks Identify project work and breakdown in tasks which are less than a day Create a prioritized work backlog which fulfills project phase or whole project goal/milestone Agree to work in iterations (sprints) of 2 or 4 weeks. Before every iteration plan what your project team will work on by taking prioritized items from backlog Estimate every task so you know how many you can fit into single sprint In the end of every sprint do a retrospective – what went well and what can be improved? Use captured completion metrics to adjust your next sprint planning © Proj3ctS - Dries Vandevyvere - 2024 Classic? Agile? Hybrid? “if all you have is a hammer, everything looks like a nail” - Abraham Maslow © Proj3ctS - Dries Vandevyvere - 2024 Wrap-up What have you learned today © Proj3ctS - Dries Vandevyvere - 2024 Reference material Project Management Body of Knowledge (PMBOK) - PMI [not included] Real-world Risk Management: white paper Perceptions and practices of project risk management Earned Value Management SAFe: essential + overview - https://www.scaledagileframework.com/ What is scrum - https://www.scrum.org/resources/what-is-scrum Agile manifesto - https://agilemanifesto.org/ Lexicon © Proj3ctS - Dries Vandevyvere - 2024 The exam Closed book 2 types of questions Open questions Multiple choice Focus on Understanding of the core concepts Application in real-life situations Connection between the topics across the PM knowledge areas Questions/Answers in dutch Terms: see lexicon ! © Proj3ctS - Dries Vandevyvere - 2024 Q&A © Proj3ctS - Dries Vandevyvere - 2024